Music streaming undercompensates artists

By Jason Herring, May 28 2015 —

When online music streaming service TIDAL launched in late March, it was accompanied by a press conference featuring 16 of the most popular musicians today, who are ‘artist shareholders’ of the company. Jay-Z, Kanye West, Beyonce, Daft Punk, Arcade Fire and Jack White were just some of the artists onstage promoting the service, which allegedly pays more royalties to musicians than any other streaming service.

But exactly what per cent of the profits are given to artists as royalties is anyone’s guess, as TIDAL is tight-lipped about the financial specifics of the service. Each of the 16 artist shareholders gets a three per cent stake, according to company executives. When 16 artists account for 48 per cent of the company’s ownership, it’s easy to be cynical about the rich getting richer.

The stakeholding artists are trying to fight this perception in recent press releases, talking at length about “speaking for the little guy.” But it’s still a sentiment coming from a bunch of millionaires.

Another issue critics have is TIDAL’s marketing. The service ran a social media campaign with the hashtag #TIDALforALL, but the cost of $20 per month for high-fidelity streaming means the service is unaffordable for many music fans.

The problem TIDAL is attempting to address is a real issue. Musicians don’t recieve enough compensation for their work. Spotify has gained notoriety for their royalty payouts in recent years. According to an article in The Atlantic, it takes the average artist 3349 Spotify plays to earn $1 from the service.

The amount of money Spotify gives artists is obviously too low, but we can’t judge TIDAL as a competitor until they reveal the amount of money their artists receive. As long as the company keeps their royalty information private, consumers should be skeptical about whether they’re better than other streaming services at all.

Ultimately, musicians are failed by more than streaming services. Even albums bought off iTunes pay the artists little more than nine per cent of the album’s cost. The problem with the industry is no different than before streaming services existed — record labels get a disproportionate amount of revenue.

So how can you actually support musicians? According to a study by the Northwestern University School of Law, 28 per cent of an average musician’s revenue comes from live performances, while only six per cent of revenue comes from sales of the artist’s compositions. While it’s never a bad idea to pay for an artist’s work, the best way to benefit musicians instead of labels is to see them live.

The musicians behind TIDAL may be acting with the best intentions, hoping to benefit undercompensated artists. But until they release hard figures detailing their royalty percentages, the service shouldn’t be trusted.

If you want to support musicians, buy a concert ticket — and pick up some merch while you’re there.